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Family Therapy: Cramer’s Prescription for Profits

Thursday, 13 Jun 2013 | 7:00 PM ET
Dr. Cramer Is in the House: Family Funds
Thursday, 13 Jun 2013 | 6:58 PM ET
Mad Money host Jim Cramer speaks with the families of "Cramerica." 9-year old Mackenzie runs a lemonade stand, and asks Dr. Cramer how she can expand her business.

(Click for video linked to a searchable transcript of this Mad Money segment)

Jim Cramer believes that parents should talk about money with their children at a young age.

In fact, he thinks the best thing parents can do for their children is teach them about stocks and Wall Street just like they teach their kids to read and write.

"Parents shouldn't worry that kids are too young," said Cramer. "You can make it a game."

Cramer speaks from experience.

"My love of stocks didn't begin in law school or college or even high school," explained the Mad Money host. "No, my love for stocks started back in fourth grade, that's right, fourth grade."

Because Cramer believes that family conversations about stocks are so important, the Mad Money host dedicated Thursday's show to it. And during the broadcast he spoke with families in the studio audience about their specific questions.

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Following is a synopsis of what was said:

Question #1: What's the best way for a my child to expand her lemonade business? Last July 4th, after expenses, she made $350 in one day.

Cramer: I would put 10% of profits in the bank. Then, I would invest in better signs, better equipment such as a better table, more employees and perhaps more corners.

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Question #2: What kind of risk profile is appropriate for someone putting money away for retirement?

Cramer: Unless you're nearing retirement, I would be 80% in stocks and 20% in bonds. Right now bonds offer too little return to be valuable in a retirement fund.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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